What is the Answer to AI Model Risk Management?
Algorithm-XLab – March 2019
Franz CEO Dr. Jans Aasman Explains how to manage AI Modelling Risks.
AI model risk management has moved to the forefront of contemporary concerns for statistical Artificial Intelligence, perhaps even displacing the notion of ethics in this regard because of the immediate, undesirable repercussions of tenuous machine learning and deep learning models.
AI model risk management requires taking steps to ensure that the models used in artificial applications produce results that are unbiased, equitable, and repeatable.
The objective is to ensure that given the same inputs, they produce the same outputs.
If organizations cannot prove how they got the results of AI risk models, or have results that are discriminatory, they are subject to regulatory scrutiny and penalties.
Strict regulations throughout the financial services industry in the United Statesand Europe require governing, validating, re-validating, and demonstrating the transparency of models for financial products.
There’s a growing cry for these standards in other heavily regulated industries such as healthcare, while the burgeoning Fair, Accountable, Transparent movementtypifies the horizontal demand to account for machine learning models’ results.
AI model risk management is particularly critical in finance.
Financial organizations must be able to demonstrate how they derived the offering of any financial product or service for specific customers.
When deploying AI risk models for these purposes, they must ensure they can explain (to customers and regulators) the results that determined those offers.
Read the full article at Algorithm-XLab.